Farm Succession Planning Fosters Resiliency in Times of Crisis

When we say, ‘the global pandemic turned our lives upside down,’ we’re likely saying something that resonates with most people. Having to adapt to one drastic change after another is hard, regardless of whether you’re someone who thrives off routine and predictability or if you’re used to uncertainty and frequent pivoting.

When it comes to dealing with unpredictability, farmers are hands-down some of the most experienced and adept folks around. So many things are forever out of their control: weather, supply and demand, animal genetics and disease, poor crop yield – the list goes on and on.

Farmers are inherent risk-takers and every day, they choose to work in what we call a VUCA environment – an environment characterized by volatility, uncertainty, complexity and ambiguity.

COVID-19 created a global VUCA environment and even though farmers are really good at handling volatility, uncertainty, complexity and ambiguity in their line of work, the pandemic compounded the ‘normal’ challenges farmers face by not only disrupting supply chains and labour forces en masse but also by threatening their personal health and safety.

In his article, Resilient Farmers vs. COVID-19, Darrell Wade writes about how the farmers who have been “quickest to adapt and excel” are those who were already involved in one of the best risk mitigating activities: professional (succession) planning.

This isn’t to say these individuals were naturally better at adapting to risk than others. It means they were more accustomed to the process of identifying risks and developing actionable plans to address them. Wade puts it like this: “resilient people are aware of their situations. They are able to maintain control and think of new ways to tackle problems.”

The purpose of succession planning is to ensure the livelihood of the farm family and often, the continuation of the farm. Even if we put aside how the pandemic has made the business of farming difficult, the threat it poses to personal health means family farms are still facing an enormous disruption risk.

Let’s imagine a multi-generation family farm in Saskatchewan. Mom and Dad are in their 60s and would like to see their two kids take it over when they retire. The family hasn’t had many conversations about what this transition might look like or when it might happen and the kids – now in their 30s – haven’t expressed whether one or both of them want to continue farming.

Without even an inkling of a succession plan, the danger the virus poses, especially to Mom and Dad, is serious on both personal and professional fronts. If one or both parents were to unexpectedly get sick and potentially not survive, what happens to the farm? How do the kids know if they are making the best decisions for the farm and themselves? What becomes of generations of hard work and dedication?

Many people postpone planning because they believe there will be more time in the future. Things are just too busy right now.

But if there is one thing the pandemic has brought into startling clarity; it is how important it is to have plans in place before the crisis is upon us. And if anyone can attest to the value of starting planning early, it is retired farmers.

When asked about their biggest regrets, retired farmers often give the following three:

1. They didn’t start planning soon enough and experienced personal and/or financial losses as a result. Family relationships may have suffered, and years of hard work may have yielded far less payoff than if they had started planning sooner.
2. They thought their will would make up for lack of planning in other areas. Having an updated will is of the utmost importance but it isn’t enough on its own to tackle all the complexities of a farm transition. Succession planning needs to be done before death – ideally, throughout various life stages – not handled afterward.
3. They assumed the farm could support the next generation AND fund their retirement. Assumptions like this are often born from miscommunication. Having open, honest discussions about each family member’s current and future needs will help protect everyone against having to make unexpected sacrifices when it comes time for the next generation to take over.

Proactive, professional planning translates into resiliency and often, success. Of course, hindsight is 20/20 so it’s easy to look back and see how we all could have been better prepared for an emergency situation. But rather than feeling defeated by all the things we could have done; we can choose to learn from the hardships COVID-19 threw at us and act now.

For any questions about succession planning or help to develop your farm succession plan, connect with us. There is no time like today to start having conversations and taking steps towards a succession plan.